Kansas Chamber Action Alert

When Congress passed the Tax Cuts and Jobs Act in December, the business community praised the long-overdue reforms. Its impact on our country and state’s economies has been tremendous. Hundreds of businesses have invested millions of dollars in their facilities, employees and communities – including many here in Kansas.

However, the tax reform debate now has shifted from Washington, D.C., to the states. Kansans, individuals and businesses, are set to face a tax increase of more than $100 million if state lawmakers fail to address the federal tax cuts during the 2018 Veto Session.

We are sending this Action Alert, asking the business community to urge lawmakers to pass reforms which protect Kansans from an unexpected tax increase because of changes in federal tax policy.

Many states conform to at least some tax provisions from the federal tax code to simplify the tax process for taxpayers. States like Kansas that are “rolling conformity” states essentially adopt the federal tax code. Some of the “pay-fors” in the federal tax changes focus on foreign income earned by businesses, something Kansas has never taxed. Kansas needs to decouple from these provisions.

For individual taxpayers, current state law only allows them to itemize on the state level if they do so at the federal level. With the federal government significantly increasing the standard deduction (now $24,000 married filing jointly), it is estimated only 5% of Kansas taxpayers will itemize. This will result in a higher state tax burden unless the Kansas Legislature changes the law this year.

Kansas must address how the federal changes impact individuals and businesses in our state. Please contact your state legislators today to avoid a tax increase. It is important they hear directly from you about how you and your business will be impacted if Kansas fails to act.